For Consumers Energy, which has about 6.5 million customers in Michigan, IBM says it will implement advanced metering technology and a smart grid field pilot network that will start being built in 2009. For AEP, which has 5 million customers across 11 states, IBM will deploy smart grid technology for customer programs in at least three cities, and provide technology, storage devices and energy-efficiency technology.Utilities are increasingly taking the plunge and deploying smart grid technology in an attempt to both increase the efficiency of existing power plants (which in turn can help avoid adding more expensive power generation), as well as get the grid ready for the addition of clean power generation. U.S. utilities plan to add 40 gigawatts of clean energy generation by 2030 and to ensure that the grid can handle that load utilities need to implement technologies like smart meters, networking software and hardware, and energy storage and grid power.

IBM has been working in the smart grid field for years. It is a member of industry groups including GridWise Alliance, Global Intelligent Utility Network Coalition, and the Demand and Response Smart Grid Coalition (which Google also recently joined), and it has also been working with smart-grid startups like Gridpoint through its venture capital group.